I also wanted to throw the Overhead and Profit determination into this discussion.
Here is Xactimates own definition of that module and how it can be included or manipulated to be On or Off.
Ed
If you look at the contents items in Xactimate, you can see that there is a "soft" overhead amount figured into the unit price, just like with structural repairs. No mention is made of "hard" overhead or profit. It stands to reason that O&P should be added to those figures as well.
"Overhead and Profit
What is and isn’t included in Xactware Pricing
OREM, UT, February 2, 2007 - For individual trades, Overhead is any additional expense not charged
(attributed) directly to thework being performed. Overhead is typically classified as an indirect cost. Profit is
formally defined as “the excess of the selling price of goods over cost.”* Profit is typically added to the cost of a
construction-related job to allow the entity performing the work to grow their company through reinvestment.
Xactware, Inc., an industry leader in providing estimating software, services, and building cost data since 1986,
has recognized three categories of overhead. It is the individual user who determines how overhead is added
to the estimate. The information listed below provides general guidelines into how Xactware’s published pricing
is created and intended to be used. When Xactware performs market research on unit prices, those surveyed
are specifically asked to not include expenses that would be included in the General Overhead and Profit markup
percentages (item #1 below).
General Overhead are expenses incurred by a General Contractor, that cannot be attributed to
individual projects, and include any and all expenses necessary for the General Contractor to operate
their business.
Examples (including but not limited to): General and Administrative (G&A) expenses, office rent,
utilities, office supplies, salaries for office personnel, depreciation on office equipment, licenses, and
advertising.
Including General Overhead expenses in an Xactimate estimate--General Overhead expenses are
not included in Xactware’s unit pricing, but are typically added to the estimate as a percentage of the
total bid along with the appropriate profit margin. These two costs together constitute what is normally
referred to in the insurance restoration industry as General Contractor’s O&P, or just O&P. General
Overhead and Profit percentages can be added in the Estimate Parameters window within an
Xactimate estimate.
Job-Related Overhead are expenses that can be attributed to a project, but cannot be attributed to
a specific task and include any and all necessary expenses to complete the project other than direct
materials and labor.
Examples (including but not limited to): Project managers, onsite portable offices and restroom
facilities, temporary power and fencing, security if needed, etc.
Including Job-Related Overhead expenses in an Xactimate estimate--Job Related Overhead
expenses should be added as separate line items to the Xactimate estimate. This is done within the
Line Item Entry window of an Xactimate estimate by selecting the proper price list items, or creating
your own miscellaneous items.
Overhead and Profit. © Copyright 2008 Xactware Solutions, Inc. All rights reserved. 2
Job-Personnel Overhead represents the non-wage related expenses incurred by a General
Contractor that are associated to having their own employees perform the work, or the total
G&A expenses incurred by a professional Sub-Contractor when using their services.
Examples: Vehicle costs, uniforms, mobile phones, depreciation on hand-tools owned by the company,
etc. Job- Personnel Overhead also includes the portion of General and Administrative expenses and
profit that correlate to employees performing billable tasks, and that are not included in the General
Contractor O&P mark-up. These expenses will be incurred either by the general contractor using
employees or by a sub-contractor, depending on who is actually performing the work. If the work is
being sub-contracted, then these expenses are commonly called Sub-Contractor Overhead and Profit.
Including Job Personnel Overhead/Sub-Contractor O&P in an Xactimate estimate-- Job Personnel
Overhead (or Sub-Contractor O&P) expenses are included in the Labor Overhead portion of each
unit price in the Xactware price list. The Labor Overhead, along with expenses for Labor Burden and
Worker Wage (wage paid to the individual) make up the Retail Labor Rate. For more information on
Retail Labor Rates, see the white-paper in the “Helpful Downloads” section of Xactware’s eService
Center at:
http://
eservice.xactware.com/apps/esc/retail_labor1.jsp.
Updating the Labor Overhead portion of the Retail Labor Rate is done from the Component List of an Xactimate
estimate. Once within the Component List, select the option to view Retail Labor Rate components. This list
allows you to view and modify all Retail Labor Rates used within the estimate. Price changes to a Retail Labor
Rate here will affect prices in all items in the estimate that use this Retail Labor Rate.
Xactware, Inc. publishes and makes unit price data available to all customers each quarter, based off market
surveys. Every effort has been made to ensure that Xactware’s users can access, view, and modify all detail
within the published unit prices.
The building cost data published by Xactware is not designed to be inclusive of sales tax, General O&P, or
Job-Related O&P within the unit prices. These can be specified and added at print time after all line items have
been listed. However, Xactware has designed flexibility into the system so this is not mandatory. Xactware’s
users have the option to add these costs to their line items as they choose. The Xactimate system is designed
to provide full detail on all costs that are incurred.
*Merriam Webster Dictionary-new edition-1994
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